Charitable Organisation Should spend grant As Per Terms And Conditions, not on whims and fancies: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the assessee is not free to use the funds voluntarily as per its own whims and fancies and that the same has to be spent as per the terms and conditions of the grant.The two-member bench of Yogesh Kumar U.S. (Judicial Member) and Shamim Yahya (Technical Member) has observed that the grants are given specifically for participation in a particular event held abroad. The grant approval includes a condition that a separate...

No TDS On Payment Of FTS To Non-Resident Not Having PE In India: ITAT

The Kolkata Bench Income Tax Appellate Tribunal (ITAT) ordered no TDS on payment of fees for technical services (FTS) to non-residents not having a Permanent Establishment (PE) in India.The two-member bench of Rajpal Yadav (Vice President) and Rajesh Kumar (Accountant Member) has observed that the payment made to non-resident recipients not having any permanent establishment in India and also that the services provided are not in the nature of royalty and fee for technical services.The...

Tax Cases Weekly Round-Up: 18 September To 24 September, 2022

Delhi High Court Reassessment Notices Issued Between 1st April 2021 To 30th June,2021 Not Time Barred: Delhi High Court Case Title: Touchstone Holdings Private Limited Versus Income Tax Officer Citation: 2022 LiveLaw (Del) 890 The Delhi High Court has held that the reassessment notices issued between 1st April 2021 and 30th June 2021, will be deemed to have been issued under Section 148A of the Income Tax Act. The division bench of Justice Manmohan and Justice Manmeet Pritam...

Agricultural Land Cultivated Only For A Few Days: ITAT Allows Exemption

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the income tax exemption under Section 54B even when the land was cultivated only for a few days during the relevant years.The two-member bench of S.S. Vishwanethra Ravi (Judicial Member) and Inturi Rama Rao (Accountant Member) has observed that part of the land could not be used for agricultural purposes but grass was grown owing to the conditions of drought. It does not disentitle the assessee as the land was held for...

AO Not Justified In Disallowing The Claim Of Interest Expense : ITAT

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has held that the AO is not justified in disallowing the claim of interest expense and treating it for capitalization in the project cost.The two-member bench of Rajpal Yadav (Vice President) and Girish Aggarwal (Accountant Member) has directed the AO to allow the claim of interest expenses of Rs.41,06,890.The appellant/assessee is in the business of developing property. It filed its return, reporting a total income. During the course...

Ola Not Liable To Deduct Withholding TDS On Payments To Drivers: ITAT

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has held that Ola is not liable to deduct withholding TDS on the payments to drivers.The two-member bench of Sudhanshu Shrivastava (Judicial Member) and Vikram Singh Yadav (Accountant Member) has observed that the AO and the CIT(A) erred in concluding that the assessee was providing transportation services which were subcontracted to the driver and, consequently, the assessee was liable to deduct tax at source while disbursing fare...

TDS Exemption On Payments To Agents Of Foreign Shipping Companies: ITAT

The Delhi Income Tax Appellate Tribunal (ITAT) has held that the payments to agents of foreign shipping companies are exempt from TDS deduction.The two-member bench of Saktijit Dey (Judicial Member) and N.K.Billaiya (Accountant Member) has observed that provisions of section 172 of the Income-tax Act, 1961 apply to payments made to agents of foreign shipping companies; therefore, provisions of section 194C of the Income-tax Act, 1961 do not apply.Section 172 of the Income-tax Act, 1961, deals...

Transfer Of Non-Self Generated Goodwill At Book Value; No Tax Can Be Levied Despite Withdrawal Of Tax Exemption: ITAT

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that, where a goodwill is acquired by incurring cost and it is transferred at book value, no tax can be levied on transfer of the goodwill despite withdrawal of exemption on capital gains tax on conversion of a sole proprietary concern into a company, for violation of the conditions provided in Section 47(xiv)(b) of the Income Tax Act, 1961. The Bench of V. Durga Rao (Judicial Member) and G. Manjunatha (Accountant...

Serving Of Liquor Is Not A Charitable Activity, Income Tax Exemption Can't Be Granted: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that serving liquor is not a charitable activity and the income tax exemption cannot be granted.The two-member bench of Yogesh Kumar (Judicial Member) and Shamim Yahaya (Accountant Member) has observed that the Commissioner of Income Tax (Exemption) has relied on various bills of the Appellant wherein the service of liquor has been mentioned. However, CIT(A) has not mentioned the details of the clarification/reply given by the...

ITAT Allows Wastage Loss Due To Diesel & Petrol Tank Breakage

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the wastage loss due to diesel and petrol tank breakage.The two-member bench headed by R.S.Syal (Vice President) has observed that where the assessee demonstrates specific reasons for excess wastage/evaporation, such reasons cannot be thrown to the dustbin. They need to be examined on a case-by-case basis."Simply because the wastage/evaporation turned out to be a little higher in comparison with the standards, the authorities...

Members Contributions To Club Towards Infrastructure, A Capital Receipt: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT)consisting of Aby T. Varkey (Judicial Member) and Gagan Goyal (Accountant Member) has held that the voluntary contributions received from the members of the club towards infrastructure facilities were contributions received for a specific purpose and should be treated as a capital receipt.The assessee submitted that the issue regarding the treatment of entrance fees received from the members was held by the AO as revenue...

Housing Credit To Poor Through Borrowings From Financial Institutions; Not A Charitable Activity: ITAT

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that grant of housing credit by the assessee trust to the lower strata of society, financed solely through the funds borrowed from financial institutions, is not a charitable activity and thus the assessee cannot be registered as a Charitable Trust under Section 12AA of the Income Tax Act, 1961. The Bench of Sonjoy Sarma (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) held that the activity undertaken...